AMC Entertainment Holdings Inc (AMC)

[WALL STREET KID]

The Department of Justice (DOJ) is currently investigating several entities for potential anti-competitive practices, particularly focusing on the use of algorithms and artificial intelligence (AI) to manipulate market prices.
#AMC #MMTLP #HYMC #GME
🚔These investigations cover a broad range of industries, including the stock market, rental housing, and ticket sales.

Key Areas of Investigation

1. **Market Control and Price Fixing**:
- The DOJ is scrutinizing companies that control significant market shares and are suspected of engaging in price-fixing activities through the use of algorithms. These algorithms can eliminate independent pricing decisions by competitors, effectively allowing collusion without direct communication.

2. **Use of AI in Price Manipulation**:
- AI-based pricing tools are under investigation for their potential to autonomously adjust prices in a way that benefits the companies using them, often at the expense of consumers. This includes AI systems in the rental housing market that have been used to set rents at higher levels.

3. **Agreements Between Companies**:
- The DOJ is also looking into agreements between companies that use shared algorithms for pricing, which can lead to coordinated market behavior. This is seen as a modern form of price-fixing, where the use of a common pricing tool replaces direct collusion.

### Specific Investigations

1. **Stock Market and GME**:
- The DOJ is investigating potential algorithmic price manipulation in the stock market, with a particular focus on GameStop (GME). The case of GME is seen as a critical example of how algorithmic trading can influence prices in an illiquid market. The actions of notable investors like DFV (DeepF***ingValue) are being analyzed to understand the impact of such algorithms[

2. **Rental Housing Market**:
- The DOJ has filed complaints against companies using RealPage's algorithmic software to set rental prices. These algorithms are alleged to facilitate a form of price-fixing by sharing non-public pricing information among landlords, leading to higher rents

3. **Ticket Sales**:
- Investigations are also underway into companies controlling both primary and secondary ticket markets. The DOJ is concerned about the use of contracts and algorithms to maintain high prices and restrict competition

### Broader Implications

The DOJ's investigations are part of a larger effort to address anti-competitive practices facilitated by modern technology. These practices include:

- **Collusion Without Direct Communication**:
Algorithms can enable companies to coordinate prices without explicit agreements, making it challenging to detect and prove collusion

- **Impact on Consumers**:
The use of AI and algorithms to set prices can lead to higher costs for consumers, whether in the stock market, housing, or other sectors

- **Legal and Regulatory Challenges**:
The evolving nature of AI and algorithmic pricing presents significant challenges for antitrust enforcement. The DOJ is employing advanced investigative techniques, including covert operations, to uncover these practices

the DOJ is actively investigating how algorithms and AI are used to manipulate market prices across various industries. These investigations aim to uncover and address modern forms of collusion and anti-competitive behavior that harm consumers and distort market dynamics.
SOURCES
https://americanbar.org/groups/antitrust_law/resources/newsletters/algorithmic-price-fixing-doj-view/
https://mintz.com/insights-center/viewpoints/2191/2024-03-07-doj-and-ftc-weigh-alleged-algorithmic-price-fixing-ai
[https://engage.hoganlovells.com/knowledgeservices/news/doj-lays-out-per-se-theory-of-liability-for-price-fixing-using-algorithms
https://sec.gov/comments/s7-08-22/s70822-20127538-288680.pdf
https://prospect.org/economy/2024-06-05-three-algorithms-in-a-room/
https://hklaw.com/en/insights/publications/2024/04/doj-triples-down-on-view-that-use-of-pricing-algorithms-can-support

The Department of Justice (DOJ) is currently investigating several entities for potential anti-competitive practices, particularly focusing on the use of algorithms and artificial intelligence (AI) to manipulate market prices. #AMC #MMTLP #HYMC #GME
🚔These investigations cover… pic.twitter.com/IedwXKuZ1h

— Frank (@LetMeBeFrankino) August 3, 2024